Reliance Petition On Himachal Power Project Infructuous – High Court

By: Ravinder Makhaik

Shimla: The Himachal High Court today declared the petition of Reliance Energy seeking allotment of a major hydropower project which had been allotted to Brakel Corporation as infructuous.

The bench consisting of Chief Justice Jagdish Bhalla and Justice Sanjay Karol which took up the matter today held that with the government having decided on all the issues about which the petitioner had sought relief, the petition had become infructuous.

The Anil Ambani company had petitioned the court that the 960 MW Jangi-Thopan-Powari project needed to be cancelled for violation of allotment agreement terms and instead it should be allotted to the second highest bidder with a matching bid of the highest bidder.

However, the Himachal cabinet, in a meeting earlier in the month, decided to issue a show cause notice on Brakel as to why the project should not be cancelled for misrepresentation of facts and violations of agreement terms.

More importantly the cabinet also decided that should the project allotment be cancelled, it would be re-allotted by inviting global bids afresh.

Taking the cabinet decision on record, the court held that since the government had decided to re-invite fresh bids, in case the project allotment gets cancelled, the Reliance Energy petition did not hold any more ground.

The Rs 6000 crore project on Satluj River had became a bone of contention between the two rival bidding companies after Brakel had failed to pay the committed upfront money on schedule.Though the project was allotted in early 2006, the earlier congress government had relaxed payment schedules.

But with change of guard, the new BJP government on assuming office at the turn of the year served notice to cough up the winning bid of Rs 36 lakh per MW early or face cancellation.

The company which by then had got a subsidiary, Brakel Kinnaur Hydropower Corporation registered in turn paid up Rs 173 crore as upfront money and Rs 20 crore as interest for delayed payments. It also agreed to altered terms which the government put forth.However the matter was taken to court by Reliance Energy citing violation of allotment terms.

With promoters of Brakel having no visible experience in executing large hydro projects, the government initiated inquiries into the antecedents of the company. The Rs 193 crore paid by the company for securing the project is reported to have be obtained after selling a part stake in the company to Adani group.

The government withheld signing of the implementation agreement and sought the courts direction on the matter in the Reliance petition that was under the courts consideration.The court had put the issue back in the government court and asked it take a decision about the allotment.